Closure costs knock hole in Powell Duffryn result

THE pounds 9m costs of closing two railcar factories in the UK dented profits at Powell Duffryn, the industrial conglomerate. The company made pounds 21.6m before tax in the year to 31 March against pounds 35.3m in the previous 12 months.

But the underlying performance was better, with profits before tax and exceptional items rising 20 per cent to pounds 28.6m.

The figures were hit by a negative net pounds 7m of exceptional items, against a net exceptional gain of pounds 11.4m from disposals the previous year.

Bill Andrews, chief executive, said that the fuel distribution arm had suffered from the mild winter and that the imposition of VAT on domestic fuel would hit its market.

But he said restructuring of the business was largely complete and it was poised for earnings growth.

The group's strong balance sheet, with gearing down to 19 per cent, left headroom for further acquisitions. Mr Andrews said he was particularly keen to expand Powell's ports interests, following a good performance from Tees and Hartlepool ports, in which the group has a 50 per cent stake.

Earnings per share were 18.6p (36.9p) and the total dividend is held at 16p. The shares eased 7p to 548p.

Ian Wild, an analyst at BZW, said the shares, which have performed strongly over the past year, could go further on expectations of strong earnings growth.